921 BRANCH DR
HERNDON, VA 20170
List Price: $249,900
Prior Sale: $403,000 06/15/2006
Listing Date: 10/08/07
-38.0%
908 BRANCH DRIVE DR
HERNDON, VA 20170
List Price: $260,000
Prior Sale: $380,000 08/10/2005
Listing Date: 07/20/07
-31.6%
6376 STAGG CT
SPRINGFIELD, VA 22150
List Price: $329,900
Prior Sale: $475,000 12/21/2005
Listing Date: 10/13/07
-30.5%
12000 MARKET ST #464
RESTON, VA 20190
List Price: $324,900
Prior Sale: $449,900 06/23/2005
Listing Date: 10/11/07
-27.8%
8526 BARROW FURNACE LN
LORTON, VA 22079
List Price: $629,500
Prior Sale: $837,550 10/03/2005
Listing Date: 10/10/07
-24.8%
916 BRANCH DR
HERNDON, VA 20170
List Price: $289,900
Prior Sale: $385,000 07/26/2005
Listing Date: 09/25/07
-24.7%
8378 OLD VICARAGE ST
LORTON, VA 22079
List Price: $499,900
Prior Sale: $650,000 12/27/2005
Listing Date: 10/10/07
-23.1%
11800 SUNSET HILLS RD #826
RESTON, VA 20190
List Price: $389,900
Prior Sale: $506,471 06/09/2005
Listing Date: 10/11/07
-23.0%
8152 BIANCA PL
ALEXANDRIA, VA 22309
List Price: $405,900
Prior Sale: $518,650 12/02/2005
Listing Date: 10/11/07
-21.7%
5992 GRAND PAVILLION WAY
ALEXANDRIA, VA 22303
List Price: $599,000
Prior Sale: $739,900 03/06/2006
Listing Date: 10/09/07
-19.0%
1015 PARK AVE
HERNDON, VA 20170
List Price: $323,000
Prior Sale: $399,000 12/22/2005
Listing Date: 10/12/07
-19.0%
13576 DAVINCI LN #78
HERNDON, VA 20171
List Price: $349,900
Prior Sale: $428,990 08/18/2006
Listing Date: 10/10/07
-18.4%
758 JACKSON ST #11
HERNDON, VA 20170
List Price: $199,000
Prior Sale: $235,000 01/26/2006
Listing Date: 10/07/07
-15.3%
2305 EMERALD HEIGHTS CT
RESTON, VA 20191
List Price: $277,900
Prior Sale: $325,000 01/31/2006
Listing Date: 10/11/07
-14.5%
6970 OLD BRENTFORD RD
ALEXANDRIA, VA 22310
List Price: $312,500
Prior Sale: $365,000 09/27/2005
Listing Date: 10/11/07
-14.4%
9064 FUREY RD
LORTON, VA 22079
List Price: $550,000
Prior Sale: $635,084 07/20/2005
Listing Date: 10/09/07
-13.4%
3820 LIGHTFOOT ST #418
CHANTILLY, VA 20151
List Price: $294,900
Prior Sale: $340,250 09/01/2005
Listing Date: 10/10/07
-13.3%
8605 WESTERN OAK DR
SPRINGFIELD, VA 22153
List Price: $349,900
Prior Sale: $401,000 05/18/2005
Listing Date: 10/12/07
-12.7%
9144 SCHOOLCRAFT LN
BURKE, VA 22015
List Price: $450,000
Prior Sale: $510,000 03/27/2006
Listing Date: 10/09/07
-11.8%
4428 ALTURA CT
FAIRFAX, VA 22030
List Price: $429,990
Prior Sale: $485,000 05/18/2005
Listing Date: 10/13/07
-11.3%
9101 FUREY RD.
LORTON, VA 22079
List Price: $509,000
Prior Sale: $570,565 10/04/2005
Listing Date: 10/10/07
-10.8%
13867 LAURA RATCLIFF CT
CENTREVILLE, VA 20121
List Price: $360,000
Prior Sale: $399,000 05/24/2006
Listing Date: 10/12/07
-9.8%
5802 APPLE WOOD LN
BURKE, VA 22015
List Price: $360,000
Prior Sale: $388,000 06/16/2005
Listing Date: 10/10/07
-7.2%
4562 KING EDWARD CT
ANNANDALE, VA 22003
List Price: $455,000
Prior Sale: $485,000 11/18/2005
Listing Date: 10/12/07
-6.2%
8453 KIRBY LIONSDALE DR
LORTON, VA 22079
List Price: $525,600
Prior Sale: $558,940 09/01/2005
Listing Date: 10/10/07
-6.0%
7841 ENOLA ST #106
MCLEAN, VA 22102
List Price: $319,900
Prior Sale: $340,000 10/05/2006
Listing Date: 10/13/07
-5.9%
4525 ENGLISH HOLLY DR
FAIRFAX, VA 22030
List Price: $580,000
Prior Sale: $610,000 05/27/2005
Listing Date: 10/08/07
-4.9%
8730 TALBOTT FARM DR
ALEXANDRIA, VA 22309
List Price: $585,000
Prior Sale: $613,200 06/30/2005
Listing Date: 10/12/07
-4.6%
11760 SUNRISE VALLEY DR #101
RESTON, VA 20191
List Price: $375,000
Prior Sale: $391,090 09/28/2006
Listing Date: 10/07/07
-4.1%
12353 BROWN FOX WAY
RESTON, VA 20191
List Price: $615,000
Prior Sale: $630,000 01/21/2005
Listing Date: 10/12/07
-2.4%
11770 SUNRISE VALLEY DR #222
HERNDON, VA 20191
List Price: $289,500
Prior Sale: $295,705 09/08/2006
Listing Date: 10/10/07
-2.1%
5723 RIDGE VIEW DR
ALEXANDRIA, VA 22310
List Price: $425,000
Prior Sale: $432,000 08/17/2006
Listing Date: 10/11/07
-1.6%
8703 ESQUIRE CROSSING LN
VIENNA, VA 22180
List Price: $910,000
Prior Sale: $918,174 11/30/2006
Listing Date: 10/10/07
-0.9%
2127 ORAM PL
HERNDON, VA 20170
List Price: $260,000
Prior Sale: $257,000 07/02/2004
Listing Date: 10/12/07
+1.2%
2492#3 CURIE CT #3
HERNDON, VA 20171
List Price: $389,900
Prior Sale: $379,000 05/18/2006
Listing Date: 10/08/07
+2.9%
2655 PROSPERITY AVE #446
FAIRFAX, VA 22031
List Price: $304,900
Prior Sale: $290,850 01/20/2006
Listing Date: 10/09/07
+4.8%
5740 WOOD CREEK LN
CENTREVILLE, VA 20120
List Price: $380,000
Prior Sale: $361,000 06/07/2004
Listing Date: 10/10/07
+5.3%
12000 MARKET ST #T77
RESTON, VA 20190
List Price: $319,999
Prior Sale: $298,900 06/12/2006
Listing Date: 10/13/07
+7.1%
11990E MARKET #803
RESTON, VA 20190
List Price: $699,900
Prior Sale: $650,010 09/27/2006
Listing Date: 10/13/07
+7.7%
12144 GARDEN GROVE CIR #201
FAIRFAX, VA 22030
List Price: $265,000
Prior Sale: $238,900 01/18/2006
Listing Date: 10/12/07
+10.9%
4633 BATTENBURG LN #922
FAIRFAX, VA 22030
List Price: $425,000
Prior Sale: $373,267 09/01/2006
Listing Date: 10/09/07
+13.9%
Sunday, October 14, 2007
Fairfax County -- On the Market
Posted by Harriet at 7:59 PM
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47 comments:
Hi there -- I'm looking for some advice from those of you who follow the market closely. We live in a nice condo in downtown DC purchased a few months before the peak of the market (2/2, $455K in 1/05). We want to get a house for our growing family (3-4bd) with a yard and good public schools. We are thinking about fairfax county, not too far from the metro.
Do people on this site suggest waiting it out for a year or more as house prices continue to fall, or do we risk losing our shirt on the condo? We expect that the house we will eventually buy will cost more than our condo, in which we have 20% equity.
Any advice appreciated. Thanks!
How old are you? How old are your children?
After my wife and I (and two small kids) moved to the area in 1992, we rented for 2 1/2 years to save up some money, and then bought a house in Fairfax City.
I'd say go ahead and put your condo up for sale, and look for a place in Fairfax County, but like many other things in life, "it depends."
You probably have negative equity in your condo because they have lost a lot of value since 2005. Your 20% is likely flushed down the drain, and you will have to lose even more money in order to hire a Realtor to get out of your situation.
You may be forced to stay in your condo 5-10 years if you want to walk away with cash in your pocket.
Or you could simply rent it out - rentals are taking a beating but you could likely get 2/3 to 3/4 of your mortgage payment.
The residential market correction in the DC area will continue until sometime in 2012 no matter which asset, condo in the city or house in suburbs. So just mark to market and do not look at your current or future residence as an investment but rather a place to live in.
Hey,
Asking strangers on the internet for advice can be very risky. None of us know the details of your situation.
The first thing you need to do is evaluate whether you can afford your current place. So long as you can make the payments on your condo then you don't have to take any drastic action. It might not be ideal living in a condo with children but so long as you can afford the payments you always have that option.
It is likely the real estate market in both DC and Fairfax is going to fall significantly over the next couple years. Just how much is still subject to some debate but it is likely condos will be hit relatively hard. It may be very difficult for you to sell your condo for near what you paid for it. (Nobody on this blog is going to be able to tell you what you might get for your condo without knowing all the details, don't just take our word for it because we can offer only the most general advice.)
There is no harm in attempting to sell your condo and seeing what kind of response you get. That is the nice thing about realtors being on commission. There are still houses and condo's selling in the area, but you need to be realistic with your pricing if you expect to be one of those that sell. Don't look at comparable asking prices, look at comparable SELLING prices.
The biggest mistake to avoid is purchasing a new home before selling your condo. You don't want to risk ending up in a situation where you are stuck paying two mortgages.
Good Luck
dcgirl - it sounds from your post like you view your options as:
a. selling and buying now
b. selling and buying later
Why not make the best of your situation and sell your condo now before prices fall further, rent for a year or two, and then buy your house after prices have fallen further?
Sure renting is a hassle, but if you really want to save a lot of money, this is the way to go.
Let's say you can save $100,000 by doing this (more money from selling your condo now than 2 years from now and less money when buying a sfh in 2 years than now). You can look at the $100,000 savings as what you are, in effect, being paid to rent for a brief period of time. When looked at that way, it makes renting seem a lot more palatable.
Besides, renting in the area in which you are considering moving to will enable you time to really get to know the area well and you can probably rent for about half the cost of buying right now.
DCgirl,
be careful about taking advice on the internet. The BH's are absolutely certain that real estate, across the board has crashed.
It has not.
In fact, large sectors are rising; some sectors are flat; some, no one knows. SFH's in my community have risen as shown on the city's records.
Places outside the beltway have fallen.
The BH's trot out opinion and abstract from vague statistics to pronouncements on the future.
They don't do the homework of examining houses, actual sales figures, and doing the math for themselves.
Even if you did all that, there is a real possibility of being wrong.
"Past performance does not guarantee future results"
Good luck to you.
I disagree with the others - its probably better to buy now and sell later if you can rent your place out.
There are NO buyers out there right now - people are selling homes at a massive discount. All you will receive is lowball offers by investors looking to rent your place and sell in 5 years.
Selling now will only add to the massive pool of unsold homes.
Rules of real estate investment - never buy during a buying frenzy ( 2004-2006 ) and never sell during a selling frenzy ( 2007 - 2012 ).
Thank you to everyone who has shared their thoughts. Don't worry -- I'm not planning to blindly follow anonymous advice from the Internet. I'm just interested in people's perspectives, particularly on the relative markets for downtown condos versus Fairfax houses.
You've all certainly provided a broad variety of perspectives:
1) Buy a house now and rent out our condo until prices improve;
2) Sell condo now and rent a house until prices drop even more;
3)Ignore the market and move for lifestyle reasons even if that means taking a loss.
We have about an 18 month window to decide what to do. We can easily afford the mortgage, so that's not a problem. Mostly we want more space. We are in our early 30s and have a 2-year-old now and are planning another kid in 2009. By then we will need another room for him or her, and some ability to host newly retired grandparents who want to make extended visits. (Not possible now in our apt.)
I've been following other units in our building. One similar to ours sold in March. The priced it at exactly what we paid back in Jan. 05. They had 2 offers in the first week and made a few extra K from the bidding war. Another similar unit went on sale about a month later. These owners priced it at 25K above the other unit. That did not make sense to me since there was such an obvious comp for less. As I expected, that one sat on the market and every few months they cut the price a little. Now it is still on the market for the same price that the other unit sold for back in March -- and about the same for what we paid. However, their listing is now very stale. We will wait and see what happens to their unit to give us a sense of the market for our specific building. I agree with the poster who said there are no buyers now. I bet they won't sell until the spring.
The houses that I've been watching in area of Fairfax that I've been interested in have seen some recent price declines -- 20K here and there for houses in the 500's and low 600's, but that seems like peanuts given how high the prices are for relatively old houses without any bells and whistles aside from the good schools/okay metro proximity.
Renting a house is an option -- though we have been moving around a lot in recent years and are craving a house we could settle into that would serve us from now at least through the elementary school years. Renting out our condo is an option in theory. I guess will depend on how low prices go. If they go so low that we can't get any of our equity out, then selling won't help us add to our downpayment for a house. To cover our mortgage, condo fees, and taxes, we'd have to rent the 2bd/2ba for about $2K a month. Given the quality of the condo and our downtown location we might be able to swing it. I haven't researched the local rental market enough to say for sure. (When we were buying the condo in Jan 05, renting a 2 bedroom apt in our old rental building would have cost us $2500, so buying was cheaper than renting and had some tax advantages.)
Anyway, thanks again for sharing your thoughts. I will keep watching this site, and will update you when that condo in our building sells. I'm curious to see what will happen to it.
"Places outside the beltway have fallen."
That is where she was talking about buying, and besides, as I have pointed out before, prices in nice suburbs inside the beltway have dropped as well, it is just that you define inside the beltway as along Route 1. She was asking advice, and you use it as opportunity to expound on your anti-bubble theories. Take a look at your post, you answered none of her questions. kh, is that for Ken Harney?
"That is where she was talking about buying, and besides, as I have pointed out before, prices in nice suburbs inside the beltway have dropped as well, it is just that you define inside the beltway as along Route 1."
Perhaps, but I have posted direct links to databases that show the converse. I have also extracted data from the databases and presented that information with my remarks. You are welcome to argue with the hard numbers. I've noticed that the data intense threads go silent while the opinion threads contain active USENET-ESQUE flames.
"She was asking advice, and you use it as opportunity to expound on your anti-bubble theories. Take a look at your post, you answered none of her questions."
Ah, but I did. I answered ALL her questions. I did not tell her what to do. I gave her my perspective. She can incorporate that with what others wrote and make her OWN decision. It may not have been your preferred answer but it was what I see happening in the market. I cautioned her against the bubblehead tendency to believe their beliefs.
Again, my guess was that my area, which is Alexandria, might, MIGHT, fall 5%, 10%, maybe as much as 15% peak to trough.
I saw falls on that order of magnitude during the oil-shock recession and after the S&L crisis.
It looks like prices are climbing. When I give my explanation for what is happening, people tell me that I don't travel enough.
This is not so say that prime alexandria real estate won't plunge to 30 cents on the dollar. I do not believe that will happen. If it does, I save on my property tax and I may take some cash and buy investment property.
Old Wall Street saying, "the time to buy is when blood runs in the street."
"It looks like prices are climbing. When I give my explanation for what is happening, people tell me that I don't travel enough."
Actually, just to be clear... it is when you post fantasies about what is the norm in far away cities you clearly have no experience with that I say you haven't traveled enough.
"it is when you post fantasies about what is the norm in far away cities you clearly have no experience with that I say you haven't traveled enough."
Could you say that again?
And.
You mind linking to some proof to back up your assertion?
I realize that there's a tradition on blogs of going, "tee-hee, you're wrong, there, that proves it, -giggle-" Which is fine.
That tendency is especially prevalent in bubblehead circles,
"DC is about to CRASH, run for it."
and
"I'm going to buy when I get my price."
I am interested in facts that back the assertion that world cities are cheaper than Lance's Washington DC.
I got into it once with a fellow. It turned out that he was looking at monthly rents in the local currency and thought they were the purchase price in dollars.
Let's go easy, rather than Tokyo, Dubai, Paris, or Moskva, check out Hyderbad, that's barely a 2nd world city.
My source is a financial backer of this projects in Hyderabad, India. His firm has built and sold, and is building condo's that are priced above Washington, DC.
"I am interested in facts that back the assertion that world cities are cheaper than Lance's Washington DC."
Hey cool, a strawman!
Here is your actual quote since you seem to have forgotten over the last few days...
==================================
"Of course by that point only professional athletes, senior corporate executives and lottery winners will be able to buy an average starter home inside the Beltway. All houses will be occupied by people who bought them within ten years of 2000."
You have accurately described the situation in every world city. New York, Tokyo, London, Mumbai, Paris, Seoul, Moscow, Rome, Berlin, Hong Kong, and so on. Are you sure you're not Pan-global-Lance?
-KH
=================================
Yep, only professional athletes, senior executives, and lottery winners, to make matters worse, that is the situation in "every world city."
lol
Leroy said:
"Yep, only professional athletes, senior executives, and lottery winners, to make matters worse, that is the situation in "every world city."
BHs have a tendency to take statements way too literally when (and only when) those statements fly in the face of BH wishes. Of course, if major world cities were the preserve exclusively of the 3 classes of individuals listed above (and only those 3 classes), then KH would be wrong. But that's not what KH was saying and to imply it was is to try to shift the sands of the argument because you can't counter it.
I can only speak to the major world cities I have been to (Western European ones), and KH is absolutely correct. City centers there are the preserve of the nouveau riche and the long-established. I.e., it takes bucks (or in this case euros) to buy into the center city ... relatively far more than it does here in the States. Even buying in mid-town Manhattan is far more affordable than buying in center-city London or Paris or Milan or Dublin. No that doesn't mean there aren't any homeowners in their city centers that aren't wealthy or long-established (i.e., the property was inherited down through the generations), it just means there are far less than here. And this carries over to rentals as well. College students are a good example here. Unlike in the US where even in the largest cities (read: NYC) students can usually find something near their university (read: Columbia for example), that is not the case in these older more established cities. Most students live at home and those that rent must travel far. Not to imply that those who live at home don't also have to travel far ... unless of course they are the priviledged children of professional athletes, senior executives, and lottery winners.
-poof- Lance reappears!
If you say "strawman" three times fast while looking at an un-mowed lawn lance is summoned!
"BHs have a tendency to take statements way too literally when (and only when) those statements fly in the face of BH wishes."
Uh huh... lottery winners, professional athletes and senior executives? Must be a lot of them in all of those cities with million+ populations she listed.
"Of course, if major world cities were the preserve exclusively of the 3 classes of individuals listed above (and only those 3 classes), then KH would be wrong. But that's not what KH was saying and to imply it was is to try to shift the sands of the argument because you can't counter it."
What a funny way to admit KH was wrong.
For the record if that isn't what she was saying then perhaps she shouldn't have said it the way she did huh?
We all know your theory about DC real estate rising to equal Manhattan and all that... new paradigm, pan-global permanently high plateau, its different here, not on my block, etc etc.
Spare us, we have heard it before...
Leroy,
What an amazing post! You just used how many words saying abosolutely nothing, BUT illustrating sooooo well your reading comprehension problems. Re-read my last post. Perhaps after a few readings you'll understand what I was saying ... and understand how you just made yourself look bad in your response to it.
"It looks like prices are climbing."
This is garbage. You base this on your claim that your tax assesment went up. I think if I want good information on Alexandria I will stick with Alexa's research.
"You base this on your claim that your tax assesment went up."
Nope. Sorry, you have it backwards.
The city is reporting sales figures above the January 2007 assessments. Here are a few:
2500 SANFORD ST $534K, $569K
3104 HOLLY ST $802K, $880K
202 BIRCH ST $658K, $760K
2819 RUSSELL RD $1,008K, $1,393K
The last place in my comp group went up $385 grand. I'm inferring from that and the other price rises that, if the city felt like it, they will raise my assessment in a few months.
You can call it garbage but these are hard numbers for this area, at this time.
From the hard numbers, I'm suggesting assessments will rise.
Hopefully they won't.
"and understand how you just made yourself look bad "
Lance, they don't believe their bull. They're trolling you.
Which is fine.
"Lance, they don't believe their bull. They're trolling you."
Good point, I actually just read an article about how every house that was sold in Tokyo last year went to a lottery winner, senior executive or professional athlete.
lol
"that was sold in Tokyo "
Don't know about Tokyo but I was looking at Greater London, then the City of London, then Mayfair.
I'm sure that non lottery winners live in Greater London but the City of London, and especially Mayfair, anyone buying or selling there has got millions.
The article at the link is dated January 15, 2007, so perhaps real estate has crashed. Here's a quote,
"In the past year, prime rents have jumped 22% to nearly $180 a square foot for the best space in Mayfair, real-estate firm CB Richard Ellis Group said in a recent report. "
$180/sq ft per year to RENT. 1,000 sqft which is a small office suite, 4 private offices, a meeting room and a reception area, rents for $180,000 per year. $15,000/month.
Here's another.
"Midtown Manhattan, the most expensive commercial-real-estate market in the U.S., ranked just 24th on the list at $62 a square foot, eclipsed by Hong Kong, India's Mumbai and even Aberdeen, Scotland."
Mumbai? Where have I heard that before?
It's like, Shiller-the-bookseller spewing about Washington DC.
Greater Washington, if you include Jefferson WV, Manassas, and DUMFRIES, has lots of land and is trending back to affordable. I've never been to Dumfries.
The City of Washington, which used to include Alexandria and part of Arlington, is a different matter.
The weirdness at study group 1006 might be a harbinger of, er, ah, a Pan-Global-Economic-Adjustment.
2819 sold for $385 grand over this years assessment. That seems like a lot of money but compared to Mayfair, London, it's nothing.
Study group 1006 is trending up. These are hard numbers, here, at this time.
It's hard to understand how people can pay that much. They must all be lottery winners, CEOs, and professional athletes.
The prices seem high to me. In that regard, I agree with the bubbleheads.
Unlike them, I accept the reality of the recent sales.
kh,
good post. as for: "The prices seem high to me. In that regard, I agree with the bubbleheads." ... looking to the past can be helpful in understanding what is happening in the present. Were a person from the 1950s suddenly transported to our time (or even to pre-this boom) they would look at the price of houses or food or whatever and think "How can people afford these astronomical prices?" The thing that wouldn't be readily apparent to them is that over the 50 years or so since "their" era, everything including salaries would have gone up. No, the increase in prices and wages/salaries do not always go hand in hand at the same time, and no not every group in society goes up by the same amount (this allows society to revalue services relative to each other), but go up they do in the end.
The last point about revaluing services touches on the pan-global effects occuring now. When you have workers in India working for next to nothing in say "skill x", then as inflation pushes up salaries here in the US, those people doing "skill x" will go up relatively less in absolute dollar values than someone whose skills are more unique and not bearing the pressures of competition. This great price inflation we've seen in the housing market is part of the "revaluing of skill costs relative to each other" that we are seeing as the world's economy becomes a globalized one where labor and services can at the instant of a electronic communication be sourced from anywhere and from anyone. And places like Washington, the political and military capital of the world, will produce more of these unique skill job (think for example "security clearance required jobs") than most areas. And since with the unique skills come relatively more pay, housing prices get pushed up as well. It's all simply supply and demand.
Lance,
I write this with an apology to blog readers who are bored senseless with these "round and round" arguments.
If anything has been "pan-global," it's been a credit and housing bubble. You can keep looking for excuses to justify gains in a particular asset (in this case, real estate), but you're not convincing me with hard data. You're purporting that globalization does have the effect of bringing U.S. workers' salaries down, but "it's different here" because we have the ability to get security clearances and work for Uncle Sam. The U.S. Government's political and military jobs aren't confined to Washington, D.C. There are plenty of installations of the latter all over the country. And as for the former, sometimes I think the country is being run by 20-something congressional aides making less than 30K a year. Truly, political salaries aren't so hot.
And your point about inflation since the 1950's can be juxtaposed with others' current ideas on the subject. This just out today: Life is harder now, some experts say.
kh,
2819 sold for $385 grand over this years assessment. That seems like a lot of money but compared to Mayfair, London, it's nothing.
Thanks for contributing sales data. This one is a bit of an oddball, I think. The sale in 2005 for $1,003,500 is marked "Q" by the county which means that it's some kind of an oddball category, an "invalid sale". Then it was transferred a year later to a relative for $0, and that same person appears as one of the purchasers in 2007 for $1,393,000, which is marked by the county as "pending verification".
The rest of the sales are marked "A" and of course show that the selling parties sold for more than they paid.
This is interesting:
“Borrowers who took out loans in the first six months of 2007 are falling behind on payments faster than homeowners who took out loans last year, according to a report by investment bank Friedman, Billings, Ramsey.”
Harriet,
Your link very much supports the argument I am making. I suspect you are not understanding my argument.
Perhaps the misconnect is that you are assuming that each and everyone of us in the DC area (and in the country) will benefit from these global changes. I am not making that assumption ... nor is KH ... hence the "lottery winners et al." discussion.
Yes, it's probably less confusing to think of it as just global changes in financing (i.e., low interest rates), but to ignore the very reasons that the dynamics of the financial world have changed is to look at the symptoms of what is happening while ignoring the cause.
Harriet, DC is a central "node" in the new "pan-global economy."
This has a resulted in a "new paradigm" wherein regardless of whatever is happening throughout the rest of this region, country and the western world, DC real estate is destined to rise to Manhattan levels.
You need to think logically, just because loose lending resulted in bubble conditions throughout most of the US and Western Europe doesn't mean DC was effected.
In DC all the price gains are simply symptoms of the "new paradigm" that has emerged where real estate prices have no relation whatsoever to earnings, fundamentals, or anything else that might suggest they aren't on their way to the moon.
In DC and Alexandria prices are going to continue to race up forever as all the world's wealth races to buy a piece of the limited an absolutely unique land that only exists in Lance and KH's neighborhoods.
Lance and KH won the lottery.
Congratulations lance!
Leroy,
No one ever said "just DC". Attributing words to others is disengenuous on your part.
I know, you really want to believe that interest rates were low in the US, Western Europe, etc. simply because a relatively small number of loans were made to people who under normal circumstances would have not qualified for their loans. (i.e., One in 100 buyers who otherwise might not have bought have caused prices to increase beyond where they otherwise would have.) You don't want to consider the fact that there has to be something much more significant out there to have caused interest rates throughout the entire first world to have plummeted ... No, you'd rather believe that the financial community throughout the entire western world (or maybe the entire world?) has colluded write bad loans and lower interest rates because of unknown reasons.
Lance,
Here's what the maestro said about rates (quoted from NYT):
"Mr. Greenspan, 81, acknowledged that the housing frenzy had been pumped up in part because of very low interest rates and in part because of the growing willingness of mortgage lenders to underwrite dubious and often fraudulent loans that were much bigger than many borrowers could realistically afford.
But he said it was a mistake to blame the Fed, which needed to reduce interest rates in order to fend off the recession of 2001 and what many economists thought was a real risk of the kind of “deflation,” an across-the-board drop in consumer prices, that had plagued Japan.
John B. Taylor, a professor of economics at Stanford University and a former under secretary of the Treasury under President Bush, recently argued that the Fed’s rate cuts after 2001 appeared to have exaggerated both the housing boom and bust.
“There has been a bit of historical revisionism going on,” Mr. Greenspan grumbled. The real force behind soaring real estate prices, he said, was a global one: a drop in worldwide inflation and interest rates, in part because of the end of the Cold War and the rise of China as a manufacturing colossus.
“The housing boom is not an American phenomenon — it’s a worldwide phenomenon,” Mr. Greenspan said. “The evidence is quite overwhelming that what we are going through is a consequence of the fall of the Soviet Union and the shift of a billion workers from central planning in to the labor market.”
The United States was only one of 40 countries that experience a housing boom after 2000, he said, and all of the booms were driven in part by low interest rates.
“If you line up all the major developed countries and all the developing countries, leaving out the Zimbabwes, inflation rates were all in single digits. This is utterly unprecedented, there is no history like this. And the consequence was a fairly dramatic decline in real interest rates, which created dramatic housing price increases around the world.”
Harriet,
Thanks for posting Greenspan's words ... But I'm confused. I thought you disagreed with what I was saying. Why are you posting this piece which very much agrees with what I am saying?
For example:
"“The evidence is quite overwhelming that what we are going through is a consequence of the fall of the Soviet Union and the shift of a billion workers from central planning in to the labor market.”
This is all part of the pan-globalization I was discussing.
Are we now on the same page?
"But I'm confused."
And despite your infantile rhetoric people here keep trying to help you, but it isn't taking.
"This is all part of the pan-globalization I was discussing."
lol
Lance you really are lost in the woods on this.
We just went through a temporary period of extraordinarily loose lending which set off an unprecedented wave of debt fueled buying in many asset classes, especially housing.
The housing bubble is just that, a bubble, a speculative frenzy in which the market temporarily departs from its fundamentals.
There is no "new paradigm" at work here as you will see over the next couple years.
Seriously, you can be as stubborn as you want but it won't change anything.
I am sure there is someone out there that is still insisting that the internet bubble wasn't a bubble and is waiting for some of his stocks to return to their "true" value... go ahead, be that guy, be the one.
"consequence of the fall of the Soviet Union and the shift of a billion workers from central planning in to the labor market."
What billion workers are they?
The Soviet Union? China? India?
Why does Greenspan think that affects land prices in DC?
Oh.
"This is all part of the pan-globalization "
I agree. The BH's don't. Here's the conundrum. Look at the link that I posted above, check out this one too. It's a major financial company.
Scroll around a little. Washington is a flat city and has a small footprint. The sprawl out 40, 50 miles and further is driven by land costs in the inner city.
The idea that prices will plunge conflicts with the sprawl, the long distance commuters, the traffic, and the concentration of jobs in the core.
That's the emotional, soft side.
The hard numbers at MLS and the assessment sites show falling prices out there (20, 30, 50 miles) and flat to slightly rising (my zipcode) and rocketing up (the pricey, premium 'hoods).
The real estate bubble collapse has been predicted since 2001 or 2002 and the event itself started in 2005. Over 3 years, sales figures on this blog show 20-40% falls, out there, not inside the beltway, not in the 10x10 square of the original city, not in the few dozen square miles of the central city.
It looks like prices about 10 miles outside the beltway are at equilibrium, the zero-point. Go out 20, 30 miles and prices are plunging, as expected. Look inward and prices are firm to rising.
Will the BH perspective come to pass? If it does, I save on my RE tax this year, the next, and the next. Bill-the-landlord can snag few places at a discount.
I don't think we'll be so lucky.
"The sprawl out 40, 50 miles and further is driven by land costs in the inner city."
Later in your post you shorten this to 20 miles. Anyway, this is not true. The sprawl began long before inner city prices began climbing. I know, I was here, you weren't. It was caused by people not wanting to live in the District because of crime, high taxes and no services.
Hey Lance, any idea why BH's are compulsively accurate but in an unbounded manner?
Do they all have broken digital watches and GPS?
The paradox is that while they can't quite understand that "20, 30, 50" and "40, 50", both mean, "out there", the same BH mind believes that Jefferson WV and Swan Street NW are equivalent.
How can that be?
I need a drink.
"The paradox is that while they can't quite understand that "20, 30, 50" and "40, 50", both mean, "out there", the same BH mind believes that Jefferson WV and Swan Street NW are equivalent."
Can't quite understand?
He pointed out a major flaw in your argument and all you can respond with are insults.
He is exactly right, your theory is sophomoric at best. Everyone has always expected the bubble to burst first in the outer suburbs and then move inward. You of course seem to think it is done... while anyone with a clue can see that it is just getting started.
Just like he said, urban sprawl isn't new. It has been here for decades and it didn't stop huge swaths of DC from turning into slums.
If you must you can be the last person on earth to figure out what is going on...
"If you must you can be the last person on earth to figure out what is going on..."
There it is, again. Personal attacks and self-righteous at the same time.
The question is still, why do BH believe that, FOR EXAMPLE if housing prices fall in Dumfries or Manassas, they'll fall on FOR EXAMPLE Swann Street?
Lance! Your friends!
"The question is still, why do BH believe that, FOR EXAMPLE if housing prices fall in Dumfries or Manassas, they'll fall on FOR EXAMPLE Swann Street? "
We have explained this enough times that I suspect my parrot could give you the answer.
There are two things going on here, first, prices in the outer areas are affected by those in the inner areas and vice versa. This has always been the case and it hasn't changed lately. To what extent they are linked depends on the specific neighborhoods.
The bigger factor is that prices throughout this region, as well as nationwide, were all driven up by the same thing at the same time, loose lending.
It is the loose lending that allowed what started as an ordinary housing cycle to race out of control into the full blown bubble we were recently seeing.
Now I am sure that what happened on the West Coast, East Coast, Nevada, Arizona, Florida, and the DC region was just a coincidence right?
Or maybe the prices went up everywhere else because of loose lending but in DC they went up because of good solid fundamentals... Or even better...
MOST of the DC region went up because of the crazy loans, just not on YOUR block.
kh,
leroy can't seem to understand that there could be more than one thing going on at a time. he likes the idea of loose lending standards because the result is unsubstantiated value ... i.e., a "bubble" that will burst once it becomes known to one and all that there never really was any additional value being created or built up. he doesn't want to understand that even if this were true (and I don't believe it is true to the extent he believes it is), that there could be other trends happening concurrently. one trend is of course that city centers throughout America are regaining their place in the American fabric. They're returning to be the hub of activity in all senses ... Americans are over with their love of driving to and from work just so that they can show off that yard on weekends when they aren't too busy mowing the lawn or fighting the new suburban traffic. He doesn't want to understand that new wealth has been created in center city areas such as "within the beltway" and that places that were long undervalued such as the District are not only "catching up" in price in terms of catching up for the initial undervalue but also benefiting from new real value that has come with the urban lifestyle that means you can leave your car at home and do what you want when you want. You see that doesn't fit in with his hope to buy something at 1999 prices. He sticks his head in the sand and pretends not to see what has occured around him ... and always steers back to the one trend that could help him.
"ne trend is of course that city centers throughout America are regaining their place in the American fabric. They're returning to be the hub of activity in all senses ..."
lol... sure lance...
I guess this beats your earlier theories about there being a "new paradigm" or "pan global nodes," now you think there is some kind of a nation wide migration back to cities and THAT is what has triggered a massive nation wide RE bubble.
Out of curiosity lance, if what we are seeing is some kind of return to DC, why is it that the suburbs exploded during the bubble? Seems like those areas should have been emptying out as all the cool people moved back into crime ridden and poorly managed DC neighborhoods.
Don't let facts slow you down though, just roll with it. I like the creative thinking you are showing in your latest explanation for why YOUR house wasn't part of the bubble.
". and always steers back to the one trend that could help him."
Well, I'm not convinced.
That could be it but then I get back to the facts,
1) The bubble talk started about 2002.
2) Around 2005, prices way the heck out there began to plunge.
3) Here we are late 2007, prices are rising in Study Group 1006 and in several other close in areas.
I just don't think the BH could be still thinking that, just wait, any day now, I BELIEVE! It will happen. I will get a fine place, close in, on my terms.
Every day I hear someone complaining about their commute.
I know people who have always rented and after 30 years, they are kicking themselves. Others who bought 20 and 30 years ago own their places outright, paid for, done. "I ain't going no-where, except feet first."
There are sound reasons for renting. A temporary assignment, not enough scratch for a down payment, plans to move in the near future, credit not established yet, can't seem to find something appropriate; there are many, many personal ones.
And this talk about DC being the pits? Where did that come from?
DC has its problems but it offers a QOL too. Even if DC politics aren't your cup of tea, there's Chevy Chase MD, Alexandria VA, and so on.
What are the BH's thinking?
"Seems like those areas should have been emptying out as all the cool people moved back into crime ridden and poorly managed DC neighborhoods."
This explains why prices are falling in Manassas and rising close in. Those areas are emptying out. The cool people are moving back.
"Americans are over with their love of driving to and from work just so that they can show off that yard on weekends when they aren't too busy mowing the lawn or fighting the new suburban traffic."
This is a large part of it.
Gotta be.
"that places that were long undervalued such as the District are not only "catching up" in price in terms"
For decades, whenever I drive on New York Avenue and glance over at the Federal Era THs, I think, "WTF"!
These places are beautiful and so close to Capital Hill, the financial areas, why are they in disrepair?
Why do people drive 1 and 2 hours to tatty, style-less, cribs in exurbia, when these places are crying for renovation?
The big elegant Federal Era TH's will never be built again.
Some of the recent price increase may, indeed be these places "catching up".
Places that are close to the metro, walking distance to K-street jobs, a small garden, and with a garage, are especially likely to boom up to their true value.
"Why do people drive 1 and 2 hours to tatty, style-less, cribs in exurbia, when these places are crying for renovation?"
Crime, high taxes, and no services (put schools, cops, trash pickup and everything under "no services.")
"Crime, high taxes, and no services (put schools, cops, trash pickup and everything under "no services.")"
Those are good points, especially the crime and the taxes.
I know a fellow who lives in Herndon and sends his boy to a private school in the district. I'm not saying that this is for everyone. Also many folks do not have school age children.
I'm in Alexandria; Virginia income taxes are lower than DC.
Still the houses in the District are quite amazing.
"I know a fellow who lives in Herndon and sends his boy to a private school in the district."
I grew up with kids who lived in McClean and Potomac and they went to private schools in the District. Some other kids who lived in the District went to Bullis, McLean, and other private schools way out in the burbs. So what? A few expensive private schools doesn't mean the District is some educational Mecca. You find excellent private schools in the 'burbs too. Nobody that has that kind of money is going to buy a run-down TH near the New York Ave. Ghettro-rail. And why did you buy in Virginia instead of the District? Just stop already.
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